- Network equipment maker faces U.S. product import ban
- ITC staff recommend judge find Arista infringed patents
Arista Networks Inc. fell for the third day amid investor concern that a U.S. trade agency may block the import of its products into the U.S. based on patent-infringement claims filed by Cisco Systems Inc.
Shares of Santa Clara, California-based Arista dropped 7.8 percent to $64.46 at the close in New York. The company has plunged 18 percent since the end of trading Tuesday, the worst consecutive three-day decline since its initial public offering in June 2014.
The first of two Cisco cases against Arista began trial Wednesday before the U.S. International Trade Commission in Washington. The commission staff, which acts as a third party on behalf of the public, has recommended the judge find that Arista infringed three of five Cisco patents in the case.
That recommendation gives Cisco an edge in the case, according to Matt Larson, an analyst with Bloomberg Intelligence in Washington. Cisco is asking the agency to block Arista’s networking devices from entering the U.S.
The judge isn’t required to follow the staff recommendation, and even his findings are preliminary -- the final decision in the case rests with the six-member commission. Trade Judge David Shaw is scheduled to release his findings by Jan. 27, and the agency is expected to complete the investigation by May 27.
A second Cisco case against Arista, involving different patents but the same products, is scheduled for trial in November with a target date for completion in August.
The cases are In the Matter of Certain Network Devices, 337-944 and 337-945, both U.S. International Trade Commission (Washington).